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Nearly all North Dakota crops project negative returns to labor and management for 2016, according to Andy Swenson, North Dakota State University Extension Service farm management specialist.
Lower crop prices will more than offset a general improvement in yields and costs relative to 2015 projections.
Probably the most surprising outcome was for soybeans and dry edible beans. The consistency in soybean profit has been evident by the near seven-fold increase in soybean plantings over the past 20 years. In 2016 soybeans project a positive return in the north-central region, break-even returns in the southeast and negative returns to labor and management in all other regions of North Dakota.
Dry edible bean production requires more inputs than soybeans, but typically project strong returns. Only the north-central region projects a positive return for dry edible beans in 2016, although several regions are near break-even.
Corn is projected to provide better returns than soybeans in two-thirds of the state. However, only the higher-risk regions for corn production, the northwest and southwest regions, project positive returns for corn.
Spring wheat projects a loss in all regions but shows an advantage over soybeans and corn in the northeast region. Projected returns to labor and management for malting barley are negative in the north and south Red River Valley, break-even in the southeast region but positive in the other six regions of the state, ranging from $15 to $38 per acre. Durum projects negative returns but shows an advantage over spring wheat in the northwest, southwest and south-central regions. Malting barley and durum typically have greater risk of poor quality and associated price discounts than most other crops.
The best regions for confection sunflowers are the southwest and north-central regions with returns to labor and management of about $10 per acre and the south-central region projects an $11 per acre loss. Oil sunflowers project a loss of more than $20 per acre in all regions.
Projected returns for raising canola are negative in all regions with the best results being minus $30 per acre in the north-central, northeast, southwest and northwest regions. Flax also projects negative returns to labor and management in all regions with the best results being minus $10 to minus $15 per acre in the western regions and in the northeast.
Although field peas project a positive return only in the north-central region, they are competitive with other crops in four other regions.
Projections for lentils, mustard and chickpeas are the best, generally ranging from a $50 to $70 return to labor and management per acre in the regions for which there are budgets. Because of disease issues, lentils and chickpeas are grown only in the western part of the state.
Another minor crop, buckwheat, has positive returns in the southwest, northwest, north-central and northeast regions, ranging from $8 to $16 per acre.
“Total costs per acre generally have declined,” Swenson said. “The price of nitrogen fertilizer was projected at 10 percent lower, fuel prices are down sharply, and seed prices for spring wheat, durum, barley, soybeans, flax, oats, millet, safflower, winter wheat and rye are lower than 2015.”
Crop insurance costs generally will be lower, and land rents are flat to down slightly. However, repair expense is projected to increase slightly, and chemical prices should be flat to up slightly.
Swenson cautions that the budgets estimate returns to labor and management with no consideration of price and yield variability, or risk. A perfect apples-to-apples comparison of crops is not achieved because different levels of labor, management and risk exist.
Source: Andrew Swenson and Kelli Armbruster, North Dakota State University
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